This is the pic of an invite for a happy hour thrown by Holland & Knight. And, just for you: "Holland and Knight has consulted with the House and Senate ethics committees regarding this event's compliance with applicable House and Senate Rules."

The five partners who comprised Holland & Knight's media practice in Tampa are leaving to start a law firm. Gregg D. Thomas, who headed the Holland & Knight group, will be joined by Carol LoCicero, James L. McGuire, Susan Bunch and James B. Lake at the Tampa practice Thomas & LoCicero. While at Holland & Knight, the partners' client roster has included the New York Times Co., Tribune Co., Knight-Ridder Inc. and Media General Inc. The lawyers, all long-time Holland & Knight employees, said they were leaving in part because of conflicts of interest and a desire to practice in a smaller firm. Their resignations come a week after 12 lawyers from Holland & Knight's former St. Petersburg office joined Trenam Kemker. Source

The Bar's rules of professional conduct dealing with communications about lawyer services contain a section dealing with advertising prohibitions. Rule 4-7.2 (c) says that lawyers "shall not make or permit to be made a false misleading or deceptive communication about the lawyer or the lawyer's services" and that a communication violates the rule if it is deceptive or "contains a material misrepresentation of fact or law."

The rules, under "prohibited visual and verbal portrayals and illustrations," say that lawyers shall not include in their ads "any visual or verbal descriptions, depictions, illustrations or portrayals of persons, things or events that are deceptive, misleading, manipulative or likely to confuse the viewer."

Holland & Knight chief marketing officer Bruce Alltop also was unavailable for an interview on why the firm uses so many paid models on its Web site. However, in response to a question from the Daily Business Review, he issued a statement saying the practice is about to end.

"Holland & Knight is in the process of redesigning the firm's marketing materials," Alltop said in the statement. "The look and feel of our Web site will be compatible with the new marketing materials, which will not incorporate the use of models as a design element. When our existing Web site was redesigned in 2007, firm management decided to use models rather than our own lawyers so as not to divert our lawyers' time from serving our clients."

Holland & Knight spokeswoman Susan Bass added that the firm's new Web site — sans models — is expected to debut in the first quarter of this year.

The disappearing associate

Well, that was ugly. In case you missed it, or you need a summary, here’s what happened on a day (yesterday) that the ABA Journal called Black Thursday and Above The Law readers have decided should be named (a little early) the Valentine’s Day Massacre:

This doesn’t include announcements of other cost-saving measures, like more salary freezes and Luce Forward rescinding its offers to new graduates and cancelling its 2009 summer program. If there’s one certainty you can take from this very unhappy day, is that this is just a sampling of what’s to come. (This morning, Peter Zeughauser agreed: “There will be more. Materially more. I’m aware of some big ones coming up.”) We’re at the beginning of this process, not the end.

And what process is this? Well, as previously noted here, it’s of course the marked decrease in client engagements; but it’s also the fallout from the 2008 financials finally becoming clear and the dire need for firms to keep partnership revenue and marketplace confidence as steady as possible. But I’m also coming to think it’s about something else: a serious, gut-check re-evaluation of the whole purpose of law firm associates. I count 297 lawyer firings in that list above; so far as I know, not one of them was a partner.

It’s becoming more evident that we’re not just looking at a normal recession with the usual coping tools (layoffs, salary freezes) from law firms. We’re looking at an extreme recession (or worse) that happens to be occurring at a time of particular vulnerability for law firms and an unprecedented willingness or necessity to reconsider traditional approaches. With every brutal update, the good folks at Citi and Hildebrandt are speaking more plainly:

[T]he current economic downturn can be viewed as an opportunity to make some fundamental changes in the way law firms are structured and do their business – changes that are not only long overdue but that will also serve the profession well as it emerges from the current recession. …

Among the measures that Citi and Hildebrandt strongly urge is the abandonment of lockstep compensation for associates:

In the current economic climate, it is irrational to have half or more of a firm’s highly compensated lawyers on largely seniority-based salaries…. Firms that have not already done so should seriously consider modifying their associate compensation structures to allow a substantial portion of compensation to be tied to individual performance in support of the firm’s goals and strategy. Firms should also be willing to consider moving away from locked-step associate advancement (and compensation) toward competency-based models. The legal profession is one of the last industries still to cling to this outmoded seniority-based method.

This would not be an unprecedented measure, of course. But as sensible a move as this would be for many firms, events are overtaking it. Some firms are already in the uncomfortable position of having clients refuse to pay for work billed by first- or second-year associates, on the premise that these novice lawyers add inconsequential value to the task at hand and that the client is not going to pay the law firm’s on-the-job training costs. A few others are facing up to the reality that Indian firms can and will complete associate-level tasks for dimes on the dollar, or that new software can streamline and automate the due diligence and document review process on which so many associate hours have been billed.

What we’re looking at here is the real possibility that the law firm associate, in its current form, will not survive this crisis. As the number of associate billable hours clients are willing to pay declines, so too does the need to develop and maintain these vast grazing herds of associates within firms. Partners are going to have to start thinking seriously about what purpose associates serve when they no longer constitute the bottom two-thirds of the profitability pyramid. If you can’t sell the billable hours they’ve been churning out, what do you do with them? What, exactly, is the law firm associate for?

The standard answer, of course, is that associates are future partners in training — that’s what the recruitment brochures maintain. That might be more convincing if attrition — natural and otherwise — didn’t slice off about three-quarters of all lawyers between first year and the partnership committee. It might be more convincing if more firms had a rational system for identifying, assessing and hiring associates, actively trained those associates from day one in the firm’s financial and culture realities, and had a strategy setting forth how many future partners are expected to come up through their own ranks as opposed to through lateral hiring.

Since all of these things are true at very few firms, and none of them are true at many, we’re left to conclude that as a general rule, associates are hired to be billing machines. If that machine stops working, then we have a serious problem.

[T]he recession will last through 2010. Law firms will use this period to substantially restructure, and beginning in 2011, things will start growing again. While there’s a lot of detail and nuance around the form this restructuring will take, it can be described in simple terms. A typical law firm bill in January 2011 will generate the same dollars for partner work as it does today, but it will generate half the revenue for associate work.

Paul’s article is titled in part: “The End of Leverage.” “Leverage” in law firm terms means associates. It’s not hard to see where this is taking us.

And in truth, not every law firm has been slow to figure this out. Calgary energy law boutique Thackray Burgess has 29 partners and 0 associates. The firm employs more than 20 “consultants,” independent contractors who look like associates but are paid by the hour, work however many hours per year they feel like, pay the firm a fee to cover their overheads costs and a percentage of the hourly rate they charge their clients, and keep the rest themselves. I don’t love the hourly billing aspects of this setup, but the idea of associates as independent contractors, retained for what the client requires and no more, makes perfect sense. Axiom Legal and Virtual Law Partners have also re-engineered the traditional associate position. I’m sure there are other examples, and more will come.

By the time this recession runs its course — and no one really knows when that will be — both client expectations about the manner in which rote legal work is done, as well as the technological and offshore solutions available to do that work, will be so different from today that there’ll no be going back. The idea that a firm can employ dozens if not hundreds of inexperienced lawyers primarily to generate revenue on low-value work will eventually be seen as a relic of the 20th century. Firms will still hire and retain associates — new partners, even laterals, have to come from somewhere — but there’ll be far fewer of them, they’ll be selected, evaluated and trained far more systematically, and they’ll be engaged, billed and compensated much differently than they are today.

We should make no mistake about how profound a change this will be, nor believe that its ramifications will be limited to big law firms. To a growing degree over the last decade or two, large multi-service law firms in urban locations have been completing the job of legal education that law schools and governing bodies have been haphazardly starting. We can complain all we want about overpriced, underskilled associates in firms; the fact is that these firms and their clients have been subsidizing the bar admissions process, providing the last three years of what amounts to a seven-year law degree. When modern marketplace economics finally puts an end to this practice, who will pay new lawyers with few skills and massive law school debts while introducing them to law practice? Who will be responsible for completing lawyers’ education and training them? We’re going to need answers to those questions, and fast.

Like I said, we’re at the start of this process, not the end. The fundamental restructuring of the law firm business model that Citi and Hildebrandt are calling for is at hand, and the changes we’re seeing now stand a very good chance of being permanent. There’s a reason I used “fired” instead off “laid off” at the start of this post.

TAMPA – Law firm Holland & Knight laid off 243 people, consisting of lawyers and support staff, at its 21 offices Thursday.

The number of employees affected in the Tampa office was not immediately clear.

Word of the layoffs created a buzz among local lawyers and legal blogs. Late Thursday afternoon, the company issued a statement saying 70 lawyer and 173 support positions had been eliminated. The firm did not say how many layoffs were in Tampa and did not name any affected employees.

Cuts were based on which practice sectors are shrinking and not likely to recover quickly and which are growing, the statement said. Employees who were laid off will be offered separation packages, a continuation of health care benefits and job placement assistance, the law firm said.

NEW YORK – July 23 – H&K Investigative Solutions (HKIS), a wholly owned subsidiary of Holland & Knight Consulting LLC, and Boyden Global Executive search have created a strategic alliance to provide public and private sector organizations with legal, security and executive placement support in the post-Sept. 11 world. The strategic alliance will be led by Bill Mitchell, executive vice president of H&K Investigative Solutions, and Tim McNamara, partner and managing director at Boyden. The HKIS/Boyden alliance combines the expertise of former FBI, DEA and Secret Service special agents and field office leaders; senior investigative and security professionals and senior executive search professionals. It creates an experienced team of individuals who will assist industry and government leaders in assessing their vulnerabilities, program implementation and protecting themselves from threats to the their personnel, infrastructure and information technology. In addition, the alliance will assist companies in searching for, and placing qualified chief security officers within their organizations as well as assisting in securing the internal and external resources needed to strategically manage their risk and security functions. “This alliance leverages our core strengths to assist companies in addressing critical security issues in protecting themselves from potential threats. Holland & Knight and Boyden are establishing an integrated service offering that will create a ‘one-stop shop’ for industry leaders,” says Mitchell. “We’ve taken the time to perform a comprehensive analysis of why the events of Sept. 11 transpired. More importantly, we asked ourselves what needed to be done to reduce the prospects of it happening again. We decided there are many reasons to collaborate with Holland & Knight,” says McNamara. The alliance will be made official this week. ABOUT HOLLAND & KNIGHT INVESTIGATIVE SOLUTIONS H&K Investigative Solutions (HKIS) is full-service investigative, security, due diligence and compliance provider that offers state-of-the-art, global investigative services, including litigation support, corporate due diligence, forensic IT services, forensic accounting, corporate compliance and security and emergency preparedness services. HKIS is a wholly owned subsidiary of Holland & Knight Consulting LLC, the non-legal service subsidiary of Holland & Knight LLP. Holland & Knight LLP is a full service global law firm that has recognized teams of lawyers in over 100 substantive areas of practice. Holland & Knight lawyers are highly experienced in evaluating the legal risks associated with rapidly changing business climates and in crafting realistic, effective solutions.

In client surveys about their concerns about lawyers, excessive fees and dishonesty in billing practices are near the top of the list of client concerns. Empirical studies suggest that a majority of lawyers who bill by the hour engage in dishonest billing practices at least occasionally.

200 During the last decade, we have seen a fairly long list of high-powered lawyers go to prison and get disbarred for billing fraud.201 Even so, the American legal profession has as yet failed to insist that lawyers be truly candid with their clients about matters relating to the lawyers’ hourly fees. Most lawyers who mislead clients about billing issues or who withhold information that clients might want to know do so to serve their own and their partners’ financial self-interest. We need to draw clear lines that prohibit deception and that require disclosure.

Whatever the courts decide are the proper standards for discipline of lawyers who have taken client funds to which they are not entitled, those standards should be enforced in a fair and equitable way. Judge Schwelb correctly noted in his dissenting opinion in

In re Addams that justice is more likely if the analysis is more context-sensitive. He urges not every misappropriation of client funds is a hanging offense.202 Also, a court’s assessment of the seriousness of lawyer dishonesty should not turn on whether the misappropriation involves unauthorized removal of funds from a client trust account or unauthorized billing of a client for fees or expenses to which the lawyer is not entitled. Both involve stealing.

Let me close by singling out a representative example: reforming state bar disciplinary systems. Current systems generally dismiss about ninety percent of complaints without investigation.66 Although some of these complaints are clearly unmerited and reflect unhappy outcomes rather than unethical conduct, other complaints are excluded because disciplinary agencies are understaffed and underfunded. As a consequence most agencies decline jurisdiction over performance issues such as “mere” negligence, neglect, or overcharging. In theory, clients could bring malpractice claims for such abuses; in practice, such remedies are too expensive to pursue except in the infrequent circumstances in which liability is reasonably clear, damages are demonstrably substantial, and the lawyer has adequate insurance or assets available to cover a judgment.67 The vast majority of cases fall through the cracks, and only a minority of state bars offer alternative dispute resolution systems to address these claims.68 Moreover, the limited available evidence on the performance of such systems suggests that they are often more responsive to the concerns of lawyers than clients.69

Not only does the disciplinary process fail to provide remedies for most complaints, the remedies that it does provide are demonstrably inadequate. For example, in California fewer than two percent of complaints result in public sanctions.

70 Seldom does the system impose requirements like reimbursement that could benefit clients or impose significant penalties that might antagonize bar leaders, prosecutors, or other powerful officials.71 Only a handful of states authorize permanent disbarment, discipline of law firms, public disclosure of complaints, or sanctions against lawyers who fail to report ethical violations.72 All of these practices must change. If an informed and disinterested agency were designing the process, they undoubtedly would. The challenge lies in finding ways to nudge a self-interested profession in similar directions.

The same point could be made about a host of other issues that should be the subject of professionalism initiatives. Many bar ethical standards are insufficiently demanding or overly self-protective. They do too little to prevent overrepresentation for clients who can afford it and underrepresentation of everyone else. Litigation and fee abuses are too frequently unremedied, and non-client interests are too seldom protected.

73 Obfuscation and obstruction are common features of trial practice,74 and money often matters more than merits.75 Yet despite the cottage industry of commentary identifying these problems, judicial, administrative and legislative officials encounter significant disincentives to address them. Judges depend on the bar for their reputation, advancement, and sometimes campaign support. Constraints of time and resources also work against adequate judicial review of lawyers’ performance.76 So too, most elected officials see little to gain from challenging an interest group as powerful as the organized bar on issues of regulatory reform, especially since consumers have not mobilized around these concerns. The same is true of disciplinary agencies, which depend directly or indirectly on bar support.

Adolfo E. Jimenez, the partner in charge of recruiting at Holland & Knight, was surprised when the midlevel associates survey published by The American Lawyer magazine ranked the firm so low.

The firm finished 73rd of 75 firms in New York, 21st of 22 firms in Chicago and 56th of 59 firms in the District of Columbia.

The bleak numbers were for a firm that takes pride in creating a friendlier working environment than most large law firms. On its Web site, Holland & Knight touts its commitment to pro bono work, diversity and a balanced work-life program.

"We were very disappointed where we ranked nationally," Jimenez said.

The good news came in Miami, where Holland & Knight finished first among six firms in associate satisfaction. Jimenez characterized that as "great news."

A Miami associate wrote on the magazine survey that Holland & Knight's Miami office was characterized by "friendliness and [a] pleasant working environment" and was "a great place to work." The American Lawyer is an ALM Media affiliate of the Daily Business Review.

Jimenez said that there are several factors that make the Miami office stand out.

"We are a dominant player," he said. "We are significant, yet our size allows for a lot of interaction between partners and associates, a lot of opportunity for quality work."

David Shahoulian, an associate in the firm's litigation department in Miami, agreed.

"It doesn't hurt that we have always been one of the busiest offices," he said. "We have a lot of clients. We bring in a lot of money."

Shahoulian said the culture of the Miami office also stands out.

"We seem to have a nice culture here in this office, and that same kind of culture is not in some of the other offices that seem to be dissatisfied," he said.

But associates elsewhere submitted scathing comments about their employer.

"Our office [Tampa] is a miserable place to work," an associate wrote. "There is no leadership, and those in charge are completely unresponsive to associate needs."

Another associate said, "Several partners in Chicago have made disparaging remarks [about] the balanced-life or part-time programs and make it difficult for women to have families."

A New York associate wrote that partners give "lots of lip service to diversity and flexible work schedules without real action to retain these talented lawyers."

An Orlando, Fla., associate said, "Historically, our firm was a large law firm that respected the individual, family and community. Over the past couple of years, our firm has begun to mirror other large firms in terms of profit motives."

Several associates also expressed dissatisfaction with the firm's handling of the situation involving partner Douglas A. Wright, who was promoted to chief operating partner in Tampa in 2005 but resigned that position weeks later after news reports surfaced that nine female lawyers had accused him of sexual harassment.

"He got a slap on the wrist and then got promoted. Brilliant," a Los Angeles associate observed.

In an age of expanding national and international firms, it's not unusual that associates in different places would have different levels of satisfaction, said Joseph E. Ankus, a legal recruiting consultant based in Weston, Fla.

"It's very difficult to stereotype what it's like to be at any particular firm," he said. "These firms, they turn into monoliths, and I think to some extent culture becomes individualized and regionalized to whichever office you tend to be in."

Holland & Knight took the results of the survey seriously, and firm leadership has tried to address some of the issues raised by the associates, Jimenez said.

Holland & Knight has tried to better focus its professional training and improve mentoring and communication in its offices since the survey was issued last August, he said.

"Both in Chicago and New York, the level of communication that's taking place is much greater," he said.

Jimenez said firm leaders also have tried to expand their travel to other offices.

He noted the survey was taken just before Holland & Knight decided to raise the salary of first-year associates to $125,000 in Miami and $145,000 in New York. The firm just finished its best year financially, Jimenez said.

The firm recently announced it was stretching its partnership track from seven to eight years — a change Jimenez said was unrelated to the survey results.

An Orlando associate wrote in the survey that the firm needs "better communication on how to make partner and once achieved how to make equity partner."

The firm currently has 669 partners, 372 associates and 95 senior counsel.

Most major firms aim to have "less partners and more associates" than Holland & Knight because associates "are getting paid their compensation, and everything else that they return above their cost is profit that gets distributed to the shareholders," Ankus said.

By comparison, Miami powerhouse Greenberg Traurig had 738 partners and 705 associates, New York-based Weil, Gotshal & Manges had 304 partners and 829 associates, and New York-based White & Case had 396 partners and 1,277 associates last September, according to The National Law Journal, another ALM Media publication.

While conceding Holland & Knight was a bit top heavy, Jimenez said there is no formula for making partner and the idea that associates believe they have a low chance of making partner is false.